RICHMOND, Va. — State lawmakers are looking to fix the fallout of a billing mistake by the Virginia Department of Health (VDH) that triggered significant cuts to services for low-income individuals with HIV.
Del. Rodney Willett (D-Henrico) said he's been engaged with providers who have had to greatly reduce services for their clients including emergency housing, food, mental health, and other wraparound supports due to a funding blow dealt by VDH.
“These are devastating cuts," Willett said. “Without those clinics getting funding, without them being able to provide the services, there is no second option for these patients.”
The impacted organizations have traditionally received money through the federal Ryan White Part B program which operates in every state. In the commonwealth, it's managed by VDH. The goal of the program is to offer medical care and a safety net to people with HIV, keeping them medically compliant and mitigating the risk of community transmission.
But last year, providers said VDH, without much notice or explanation, significantly reduced their Ryan White disbursements, causing organizations to slash staff and limit their ability to help people.
According to data presented publicly by VDH in January, its Ryan White program dropped its number of direct service providers from 27 to 14 and decreased the number of approved services from 21 to 7.
“When that news came, and came suddenly, it was devastating," said Karen Legato of the Health Brigade, which reduced case management and eliminated emergency assistance as a result of the cuts. "You go into a crisis mode at that point.”
“What is happening to the patients that you are no longer able to serve?” reporter Tyler Layne asked.
“That’s a good question. Are they lost to care?" Legato said. "Once you start interrupting the cycle of care and the way things are set up, if they drop out of care, we don't know where to find them.”
Nearly a year later, CBS 6 was able to trace the genesis of the cuts to VDH erroneously overbilling a pharmaceutical company, Gilead, for invalid rebates. Gilead said the incorrect billing occurred from 2021 through 2023 and that VDH is working to repay the company.
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VDH 'billing error' triggers cuts to HIV services for poor Virginians
Gilead said it has not had this problem with any other state.
Rebates from pharmaceutical companies are one of the primary sources of funding for the Ryan White program. The other major source of funding comes from federal grants, and those amounts have remained relatively steady year over year.
Multiple providers told CBS 6 they never knew that VDH's billing errors had anything to do with why they lost funding.
“There was definitely a lack of communication," Willett said. "I think folks could have been more forthcoming. Now, I think folks are on the same page. We recognize the problem, we're documenting the need, we will get a budget item in there to deal with it."
Willett said moving forward the state legislature is looking to fill the funding hole, possibly even on a continuous basis, to fix what he described as a "self-inflicted wound."
“What I've heard from VDH and others is we shouldn't expect the drug rebates to come through now or in the future and fill all these gaps," Willett said.
As far as how much state money may be necessary, Willett said that's still unclear. While he believes a minimum of $5 million is needed, other lawmakers have proposed budget amendments ranging from $12 million to $29 million.
Senator Barbara Favola (D-Arlington) is one of the lawmakers who submitted a budget amendment under the belief that the impacts to the Ryan White program were due to cuts from the federal government. She said she was "completely unaware" of VDH's billing mistakes.
"VDH has to make some corrections, and we have to be diligent going forward and efficient and careful. We need to be held accountable for dollars that we're spending, and we need to make sure that recipients who deserve these services get these services right," Favola said. "We may have to put some additional requirements in there to ensure that the Virginia Department of Health doesn't make the same mistake again."
VDH has not answered questions from CBS 6 about how much it overbilled for rebates, how much additional state funding would be needed to fully restore the program, and whether VDH is requesting budget amendments itself. In January, State Health Commissioner Dr. Cameron Webb told lawmakers future rebates remain uncertain but that the agency was seeking additional supplemental and emergency funding.
Willett said he's confident the new administration will put in place the proper monitoring controls to prevent something like this from happening again.
“We’ve got, I think, a really viable going forward plan. But it is super unfortunate how things were handled before. The uncertainty of this — no patient, especially dealing with these types of issues, no patient should have that kind of uncertainty in their health care," Willett said.
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